Arizona Governor Doug Ducey signed a bill (S.B. 1363) into law, on May 17, 2016, requiring private health plans to pay for telemedicine services across the whole state rather than only services received in rural areas of the state.
The State’s current telehealth coverage law, which went into effect January 2015, only requires commercial health insurers to cover telemedicine-based services provided to patients in rural areas. That deprives all the Arizona residents in non-rural areas from enjoying telemedicine services under their insurance benefit plans. (We imagine the citizens of Phoenix giving the Governor a collective “thumbs up” when he signed the new bill.).
With the passage of this bill, Arizona expanded coverage opportunities for telemedicine services. But there is still room to improve. For example, it covers only a limited set of telemedicine services (there are eight enumerated categories of “health care services”), rather than full equivalency of covering all services delivered via telemedicine to the extent the service is covered when delivered in-person. Additionally, the law also allows health plans to limit the coverage to those health care providers who are members of the plan’s provider network. The law contains no payment parity language, an important concept we have discussed extensively with policymakers. The revised statute becomes effective January 1, 2018.
Language has meaning, and words are important in statutory construction. Telehealth providers in other states can look to the Arizona experience as a lesson when advocating for and drafting telehealth commercial coverage laws in their home states.
The newly-revised statute provides as follows:
20-841.09. Telemedicine; coverage of health care services; definitions:
Currently, 29 states plus the District of Columbia have telehealth commercial insurance laws requiring commercial health insurance companies cover services provided via telehealth to the same extent those services are covered if provided in-person. Continued expansions in reimbursement mean providers can enhance telehealth offerings, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction. Commercial insurance reimbursement is among the five telemedicine trends driving health care transformation in 2016 and beyond.
For more information on telemedicine, telehealth, virtual care, and other health innovations, including the team, publications, and other materials, visit Foley’s Telemedicine and Virtual Care practice.